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The First Trade & Pre-open Tour Recording… Staying high, and dry.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Wednesday had been likely to probe above Tuesday morning’s 2650.00 high, but probably only to 2653.00. That essentially inverted when the open was greeted above 2653.00. Its reaction down to 2647.00 support recovered into a 20-point rally into the noon hour. Defensive posturing ahead of the FOMC’s policy statement had pulled back to 2655.00, better enabling the news reaction to surge 29 points to 2684.00. The Fed Chair’s Q&A extended that to attack 2690.00, which was finally enough. The final hour dipped to 2674.25 and ranged narrowly into the close, perhaps inhibited ahead of MSFT and FB post-close earnings.
Overnight action’s new info…
Similar to AAPL after Tuesday’s close, reacting favorably to MSFT and FB post-close earnings beats enabled futures to greet the Globex open testing 2683.00. Gradually improving from there back to yesterday’s highs eventually probed higher to attack 2692.00 before midnight. Flat-to-lower ranging since then has drifted back down to attack 2681.00, which the earlier Globex low had done already.
If, then… (notes to accompany the Tour recording)
CORRECTION: My early departure on Friday has been delayed by one week. This week will finish out normally… Closing above 2666.00 from under 2656.00. puts into play 2701.00 (subject to a second consecutive higher confirming close Thursday, which could already fulfill 2701.00). Or, not. Having closed above 2666.00, gapping down under 2656.00 Thursday would reject Wednesday’s upside momentum. Gapping down isn’t currently indicated, but only closing back under 2656.00 would still qualify if combined with another reversal setup — like a Globex-flip setup that would form by maintaining an open under the earlier Globex low after having probed yesterday’s highs overnight. Any downleg would be compared against the 1-1/2 week-long Ascending Triangle that tried breaking out yesterday.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2690.50 would be likely to trigger the 2687.00 bias-up signal at 10:15. Exiting the open under 2680.25 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2688.25 | 2687.00 |
| …would target | 2696.25 | 2695.00 |
| Bias-down: under | 2674.75 | 2673.25 |
| …would target | 2668.25 | 2666.75 |
| Signal status: LATE BIAS-UP | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
1. At 10:15, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 10:15 would be “no-bias,” and the bias signals should define the bias environment’s range.
— A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 10:15 would invoke a grace period through 10:30 to trigger a late signal.
— “Late” signals don’t require testing the opposite bias signal, but it’s still likely.
4. Still testing the bias signal at 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Market Wrap (recording & summary)
CORRECTION: My early departure on Friday has been delayed by one week. This week will finish out normally.
Wednesday’s rally began somewhat impatiently, probing overnight above 2648.00 before the 1-2 hour false break window. The 2653.00 open wasted no time fulfilling the bias-up target, which was 2653.00. And its post-open pullback to 2647.00 recovered into a 20-point rally into the noon hour.
The only signs of patience was in the FOMC’s policy statement. By then, defensive posturing had pulled back to 2655.00, and correcting the morning’s excessive optimism created room for more. The news reaction surged 29 points to 2684.00, and the Fed Chair’s Q&A extended that to attack 2690.00.
The final hour dipped to 2674.25, and ranged narrowly into the close. Perhaps inhibited ahead of MSFT and FB post-close earnings. Reacting favorably to their beats similar to AAPL enabled futures to firm up to 2683.00, also inspired by NQs surging.
Closing above 2666.00 from under 2656.00. puts into play 2701.00 (subject to a second consecutive higher confirming close Thursday, which could already fulfill 2701.00). Or, not. Having closed above 2666.00, gapping down under 2656.00 Thursday would reject Wednesday’s upside momentum. The 1-1/2 week-long Ascending Triangle only probed higher, but ended the day only overlapping its prior high — vulnerable to reversing down.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Daily Spot…
A daily summary of high-profile members of several complexes… View a more detailed discussion of each chart at the end of today’s Market Wrap.
Eurodollar Mar Contract (EC, ETF: (FXE, UUP))
Still ranging flat Wednesday morning didn’t undermine the outstanding requirement for the confirmed breakout to produce its minimum eventual third higher close. Surging out of the FOMC statement closed above 1.1485 to fulfill the minimum objective, while also suggesting much more follow-through to the upside.
Gold Apr Contract (GC, ETF: (GLD))
Already probing higher overnight to within $5 of the 1325.00 target (basis Apr, 1319.50 basis Feb) was retraced back into Tuesday’s range. The FOMC statement triggered a post-close surge that fulfilled the target. No higher objective is in-play, but an immediate reversal down in this pattern is unlikely.
Silver Mar Contract (SI, ETF: (SLV))
Fresh highs overnight retested the prior high that had preceded the interim downtrending channel. A post-close surge to fresh highs above 16.05 suggests the rally will extend higher.
30-year Treasury Mar Contract (US, ETF: (TLT))
Wednesday’s narrow sideways range seemed oblivious to the FOMC events. A second consecutive higher close would have confirmed the recent strength, so delaying an upleg much beyond Thursday morning would start to become bearish.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday morning’s rally to fresh highs attacking 55.00 was retraced back down to “lower prior highs” at 54.15. The rally effort remains intact.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Flat ranging at the lows is greeting Thursday’s EIA report from a position of weakness. A fresh low in the sequence is likely before any durable rally can be credible.
Mid-day Update… High expectations.
Strong rally ahead of FOMC.
The post-open dip down to this morning’s 2647.00 bias-up signal held to maintain the bias-up, quickly extending back up to and through the 2653.00 bias-up target. Well through it. To and through last Friday’s 2660.00 “higher prior lows” and up to 2667.00.
That’s pretty optimistic ahead of an FOMC policy statement and Fed chair Q&A. Reacting down through the noon hour’s exit is testing 2657.00, and reintroducing some pessimism. A favorable reaction to the news won’t be as difficult.
A favorable reaction to the news also isn’t required to be maintained. A favorable reaction isn’t required at all. But closing above 2666.00 would start requiring the rally to resume. And having probed 2666.00 intraday, closing back under 2656.00 would suggest the bounce is done.